By John McCrank and Ashley Lau
NEW YORK, Sept 4 KCG Holdings Inc, the
trading firm formed in July after Getco Holding Co's $1.4
billion takeover of Knight Capital Group, said on Wednesday that
the head of its exchange-traded funds team and two other
managers were leaving the company.
The managers leaving are Reggie Browne, Eric Lichtenstein
and Darren Taube, a company spokeswoman said. The two sides had
been unable to agree on the terms of new contracts, a person
familiar with the situation said.
Browne, known as "the Godfather of ETFs," joined Knight
along with Lichtenstein and Taube in 2009 from brokerage Newedge
"Those three guys know more about ETF trading than most of
us will ever learn," said Dave Nadig president of IndexUniverse
LLC's ETF Analytics.
He said that, from a client relationship standpoint, the
loss of Browne was a blow to KCG, because Browne has
relationships with every issuer on Wall Street, all of the major
ETF trading partners, hedge funds and large financial advisers.
"If you asked me yesterday, I would have said that Knight
really has two things going for it, a talent edge and a
technology edge, and now they have a technology edge," Nadig
Severance costs will total $15 million, and will be
recognized in the third quarter, KCG said in a regulatory
Joe Mazzella and John Dibacco oversee the ETF group on an
interim basis, which KCG plans to further develop, the source
KCG is one of the biggest U.S. market makers in ETFs.
In August last year, a software problem at Knight led to
millions of unintentional orders flooding into the market,
leaving the firm with a huge position it had to unload at a loss
of $461.1 million. Knight secured $400 million in rescue
financing in exchange for a more than 70 percent stake in the
company from a group of investors that included Chicago-based
Getco and was led by Jefferies Group Inc. Jefferies later helped
finance Getco's proposed acquisition of Knight.